Wednesday 17th December 2014
|Text too small?|
The Financial Markets Authority won't chase South Canterbury Finance in a civil claim, saying it can't justify the cost of doing so and leaving it to Crown Asset Management (CAML) to pursue the failed lender's directors.
The market watchdog today closed its inquiries into a potential civil claim against SCF, two days after former director Ed Sullivan was this week sentenced to 12 months' home detention and 400 hours' community work from five charges involving related party lending that should have been disclosed. Sullivan and his co-accused were acquitted of the major charges pursued by the Serious Fraud Office, involving SCF's inclusion in the government retail deposit guarantee scheme, which saw taxpayers stump up $1.58 billion to cover depositors.
The FMA looked at whether SCF met its continuous disclosure obligations and the roles played by the firm's trustee and auditor, but didn't find enough evidence to justify the extra cost of taking it further, it said in a statement. In making its decision, it took into account CAML's claim against the directors for failing in their duties, and that a large number of investors were covered by the guarantee. CAML was set up to manage the remaining assets covered by the guarantee.
"Given CAML's civil case and the criminal case that has recently been before the courts, the FMA doesn't believe further proceedings are appropriate," director of enforcement Belinda Moffat said. "The FMA has made the decision to close these inquiries after very careful consideration of our responsibility to act in the best interests of the public."
Investors in SCF's listed preference shares, who weren't covered by the guarantee, this month met with the FMA to see whether the watchdog would lead a case against senior people in government and at the lender.
No comments yet
MARKET CLOSE: Blue-chip stocks Meridian, A2 lead market lower
NZ dollar rises on Brexit hopes, rate cut reassessment
Three not failing, just needs a new owner - MediaWorks CEO
Major investors back new CBL class action targeting directors
Rip Curl purchase a done deal on Kathmandu proxies alone
Comvita chair Neil Craig eyes the exit once he finds a new CEO
Mercury raises guidance on increased storage, high spot prices
Eroad reports strong 3Q sales growth, eyes ASX listing
MediaWorks puts TV business on the block
NZ dollar benefits as preliminary Brexit deal improves risk appetite